Govt approached IMF after making consultations with friendly countries: finance minister

ISLAMABAD: Finance Minister Asad Umar on Saturday said the government decided to go to the International Monetary Fund (IMF) after making consultations with the friendly countries.

“A team of the IMF will arrive in Pakistan on November 7 to negotiate a loans program for Pakistan,” he said while talking to newsmen in Islamabad.

He said that he never claimed that he would not go to the IMF. He said Pakistan had approached the IMF 18 times before — seven times under the military rule and 11 times under the civilian governments. This would be the last time that the incumbent government would turn to the IMF.

Asad Umar said the country was facing $2 billion deficit a month and current account deficit had climbed to $18 billion in the meanwhile.

He said no friendly country including China and Saudi Arabia had placed conditions on loan. He said although the government was going to seek aid from the IMF but national integrity would not be compromised.

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The minister said the reforms being introduced by the government would not have any negative effect on the poor.

He said special steps had been introduced in the finance bill for the export sector. He expressed the government’s resolve to increase exports to come out of the cycle of loans.

The minister said stock market improved by 600 points with the announcement of going to the IMF.

He said trade deficit increased due to rise in prices of petroleum products, following sanctions on Iran.

Asad Umar said foreign exchange reserves had been reduced to eight billion dollars. He said rupee devalued against dollar by seven percent from April to September this year.

Meanwhile, talking to the state television on Saturday, the finance minister said a financial bailout package is mandatory for Pakistan in order to bridge the 12 billion dollars financing gap was being faced by the government.

He said going to the IMF was one of the options being explored by the government which also included contacts with friendly governments and tapping the potential of other sources.

Asad Umar said the decline in stock market was not a unique phenomenon to Pakistan. He said Pakistan stock market declined 9% since July while the market of India slid to 13% due to a host of factors, including the international ones like trade war between China and the US, renewed global sanctions on Iran and economic situation of Argentina.

He said going to IMF sent positive signals to other international financial institutions and they become more willing to help the economies in distress.

To a query, he said the US should not be worried about our loan, it had to itself give China billions of dollars.